YK Poudel
Urgent innovative and multi-sectoral actions are needed to adapt to and mitigate the threats from the crises of climate change, biodiversity loss and pollution in Bhutan. The country requires USD 0.385 billion for adaptation and USD 0.6 billion for mitigation initiatives in the short-term, according to the Nationally Determined Contribution (NCD) report.
Bhutan has been accessing funds for climate financing projects from several areas. However, the process of accessing the finance is cumbersome.
The discussions on the issues held earlier during the Bhutan Climate Roundtable continued at a recent Climate Finance Roundtable.
The agencies involved in mobilising, channelling and utilising substantive multilateral climate finance funds into Bhutan call for negotiating agencies to work together and ensure ease in the process.
Ministry of Finance Planning Officer, Dhendrup Tshering, said that the climate financing projection is highlighted as a part of the technical assessment report of the six Least Developed Countries (LDC) in Asia. Bangladesh has the highest share of the resource with access to USD 8.9 billion. Bhutan stands in fifth place with USD 268 million as climate funds.
“The long-term strategy report projects that Bhutan would require an additional USD 6,484.8 million for climate financing,” he said.
The National Adaptation Plan launched last month projects a requirement of USD 13,559 million for adaptation projects in eight areas that the government has prioritized currently.
According to Dhendrup Tshering, the lack of capacity to translate climate financing documents and policies into investment plans is a challenge for many LDCs including Bhutan. “Bhutan has the possibility of looking into other funding opportunities such as non-grants instruments and non-concessional loans—the unlooked blind spots for Bhutan.”
Royal Society for Protection of Nature Executive Director, Wangchuk Namgay said that Bhutan has access to various financing windows.
Global Environment Facility (GEF 7) fund of USD 5.2 million, Least Developed Country (LDC) Fund of USD 20 million, Green Climate Fund (GCF) of USD 10 to 20 million and Adaptation Fund of USD 10 million are the four major areas through which Bhutan gets climate finance.
According to Wangchuk Namgay, requirements within GCF keep evolving with new requirements every year. “Further, the process is hindered by the need for scientific climate rationale and climate data,” he said.
The lengthy accreditation process has made the process complex and cumbersome for availing GCF and Adaptation funds.
“Bhutan under LDC fund, is preparing a proposal of USD 20 million for urban resilience projects. The fund is dedicated exclusively to LDCs. Once Bhutan graduates from the LDC category by early 2024, the country is ineligible for the fund,” he said.
The GCF, he explained is a competitive fund which allows proposals ranging from USD 10 million and 250 million. “However, accessing adaptation funds is possible under two measures—through UN agencies in the country such as FAO, UNDP among others and secondly under Direct Access Entity wherein an accredited national agency like Bhutan Trust Fund for Environmental Conservation can tap in the funds,” he said.
For Bhutan, he said, having a simplified accreditation process and simplified common template for all LDCs would streamline the proposal method. Additionally, he recommended government continue supporting Direct Access Entities to get more agencies accredited involving relevant Civil Society Organisations.
Technical Coordinator of Food and Agriculture Organisation Bhutan, Jigme Tenzin, said that the agency in partnership with the government is for now working in policy development and data management. “FAO Bhutan has proposed for USD 10.4 million to fund a four-year project that begins in 2026.”
The FAO Bhutan and the energy and climate change department are currently implementing a capacity-building initiative for the transparency project.
Bhutan has made a carbon neutrality for all times pledge during COP15 in 2009. To tap into timely funds for climate finance initiatives, Bhutan and other LDCs must have a meeting among the countries and present at the Conference of Parties (COP28).
Dhendrup Tshering said that the requirements were not imposed on the countries, but rather discussed and agreed terms. If the relevant agencies and government of the LDCs agree to change the terms, it will be easier to demand the need for LDCs in COP this year. “Developed countries still have not delivered on their decade-old promise to deliver US dollars 100 billion in climate financing annually.”
According to reports, public climate finance including adaptation finance, for LDCs doubled to USD 15.4 billion in 2019 from USD 6 billion in 2016.
Globally, over USD 143 billion is spent on biodiversity protection every year. This is far below the required amount of around USD 824 billion.